543 U.S. 14 (2004)
Respondent James N. Kirby, Pty Ltd., an Australian manufacturing company, sold ten containers of machinery to the General Motors plant located outside Huntsville, Alabama.1 Kirby hired International Cargo Control, an Australian freight forwarding company, to arrange for delivery by through transportation from Sydney, Australia, to Huntsville.2 To formalize their contract, ICC issued a bill of lading to Kirby designating Sydney as the port of loading, Savannah, Georgia, as the port of discharge, and Huntsville as the ultimate destination.3
ICC then hired Hamburg Südamerikanische Dampfschifffahrts-Gesellschaft Eggert & Amsinck, a German ocean shipping company, to transport the containers.4 Hamburg Süd issued its own bill of lading to ICC with similar designations and terms.5 Acting through a subsidiary, Hamburg Süd hired petitioner Norfolk Southern Railway Company to transport the machinery from the Savannah port to Huntsville.6
The Norfolk train carrying the machinery derailed en route, causing an alleged $1.5 million in damages.7 Kirby had separately insured the cargo for its true value with its co-respondent Allianz Australia Insurance Ltd., which reimbursed Kirby for the loss.8 Kirby and Allianz then sued Norfolk in the United States District Court for the Northern District of Georgia, asserting diversity jurisdiction and alleging tort and contract claims.9
The District Court granted Norfolk’s motion for partial summary judgment, holding that Norfolk’s liability was limited to $500 per container.10 A divided panel of the Eleventh Circuit reversed that decision.11 The Supreme Court granted certiorari to decide whether Norfolk could take shelter in the liability limitations of either bill of lading.12
Whether federal law governs the interpretation of the two bills of lading?13
When a contract is a maritime one, and the dispute is not inherently local, federal law controls the contract interpretation.14 Our authority to make decisional law for the interpretation of maritime contracts stems from the Constitution’s grant of admiralty jurisdiction to federal courts.15 A maritime contract’s interpretation may so implicate local interests as to beckon interpretation by state law, but when state interests cannot be accommodated without defeating a federal interest, federal substantive law should govern.16
Yes. The ICC and Hamburg Süd bills are maritime contracts because their primary objective is to accomplish the transportation of goods by sea from Australia to the eastern coast of the United States.17 To be sure, the two bills call for some performance on land; the final leg of the machinery’s journey to Huntsville was by rail.18 But under a conceptual rather than spatial approach, this fact does not alter the essentially maritime nature of the contracts.19
Applying the two-step analysis from Kossick, the contracts are maritime because their primary objective is transportation by sea.20 The case is not inherently local because applying state law would undermine the uniformity of general maritime law and the liability regime Congress established in COGSA.21 The same liability limitation in a single bill of lading for international intermodal transportation often applies both to sea and to land.22
Federal law governs the interpretation of the two bills of lading.23
Whether the liability limitation in the ICC bill of lading extends to Norfolk Southern Railway Company as a sub-subcontractor?24
The Himalaya Clause extends to any servant, agent or other person (including any independent contractor) whose services have been used to perform the contract.25 There is no special rule requiring privity or linguistic specificity for Himalaya Clauses; they are construed like any other contracts by their terms and consistent with the intent of the parties.26 Liability limitations must be strictly construed and limited to intended beneficiaries.27
Yes. The plain language of the Himalaya Clause indicates an intent to extend the liability limitation broadly to any servant, agent or other person (including any independent contractor) whose services have been used to perform the contract.28 Read naturally, the word any has an expansive meaning, that is, one or some indiscriminately of whatever kind.29 There is no reason to contravene the clause’s obvious meaning.30
The expansive contract language corresponds to the fact that sea and land modes of transportation would be involved in performing the contract.31 Kirby and ICC contracted for the transportation of machinery from Australia to Huntsville, Alabama, and, as the crow flies, Huntsville is some 366 miles inland from the port of discharge.32 Thus, the parties must have anticipated that a land carrier’s services would be necessary for the contract’s performance.33 It is clear that a railroad like Norfolk was an intended beneficiary of the ICC bill’s broadly written Himalaya Clause.34
Accordingly, Norfolk’s liability is limited by the terms of that clause.35
The liability limitation in the ICC bill of lading extends to Norfolk Southern Railway Company as a sub-subcontractor.36
Whether the liability limitation in the Hamburg Süd bill of lading binds Kirby and limits its recovery against Norfolk?37
When an intermediary contracts with a carrier to transport goods, the cargo owner’s recovery against the carrier is limited by the liability limitation to which the intermediary and carrier agreed.38 The carrier had the right to assume that the Transfer Company could agree upon the terms of the shipment.39 The cargo owner’s remedy, if necessary, is against the intermediary.40
Yes. ICC and Hamburg Süd agreed that Hamburg Süd would transport the machinery from Sydney to Huntsville, and agreed to the COGSA package limitation on the liability of Hamburg Süd, its agents, and its independent contractors.41 When an intermediary contracts with a carrier to transport goods, the cargo owner’s recovery against the carrier is limited by the liability limitation to which the intermediary and carrier agreed. Reliance on agency law is misplaced here.42
The traditional indicia of agency, a fiduciary relationship and effective control by the principal, did not exist between Kirby and ICC.43 But that is of no moment.44 The principle derived from Great Northern does not require treating ICC as Kirby’s agent in the classic sense.45 It only requires treating ICC as Kirby’s agent for a single, limited purpose: when ICC contracts with subsequent carriers for limitation on liability.46
In holding that an intermediary binds a cargo owner to the liability limitations it negotiates with downstream carriers, we do not infringe on traditional agency principles.47 A limited agency rule tracks industry practices.48 In intercontinental ocean shipping, carriers may not know if they are dealing with an intermediary, rather than with a cargo owner.49 If the rule were otherwise, carriers would have to seek out more information before contracting, so as to assure themselves that their contractual liability limitations provide true protection.50
That task of information gathering might be very costly or even impossible, given that goods often change hands many times in the course of intermodal transportation.51 The decision produces an equitable result because Kirby retains the option to sue ICC for any loss that exceeds the liability limitation to which they agreed.52
The liability limitation in the Hamburg Süd bill of lading binds Kirby and limits its recovery against Norfolk.53